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Monthly Archives: July 2013

DEMOCRACY in the USA is facing a fundamental and frightening challenge: One group in America is effectively and with great determination blocking the proper functioning of the national government. This group, whose effort is funded by billionaires (like the Koch brothers and a few industries such as coal and energy), is basically anti-government.

Driven by a desire for protect their profit margins, these obstructionists focus some of their efforts on attacking environmental and health care programs. They want to exploit the natural resources of America but are unconcerned about protecting them. They propose no positive program for conservation which one would expect from political Conservatives. Basically theirs is the totally negative platform of “NO.” These Obstructionists have become latter-day “Nay-sayers.”

At their core, the Obstructionists are not only opposed to a black President or Latino migrants, they are against “Big” government which they fear has become too powerful. Their un-tinted glasses tell them that in future elections a majority of the electorate will enact programs to which they, as Obstructionists, are opposed. So they see no alternative but to say “No” to any increases in the budget or any new programs which economic circumstances might warrant.

Nothing has worked to make the Congressional “Tea-Party” members shift their opposition. Reason and compromise are not in their vocabulary, nor are such words as cooperation, compassion, equity, fraternity, harmony, moderation or tolerance used in their rhetoric. The result is stalemate at the heart of the kind of democratic government envisioned by our Founding Fathers.1

The obstructionists in Congress should re-examine the Compromise of 1790 where the disputed location of the national capital (Philadelphia v. the more southern Potomac) was up for barter in return for the federal assumption of state debts. This historic compromise demonstrated that a majority of congressmen were willing to bargain for the sake of national unity.2

It was Edmund Burke who stated in 1775 that: “All government — indeed every human benefit and enjoyment — every virtue and every prudent act — is founded on compromise and barter.”3

Today there is no such willingness on the part of Congressmen and women to make compromises in the national or public interest. Indeed, “the public interest” is no longer being used as an expression in US politics. The consequence is that millions of Americans are being deprived of essential support as well as enhancing a variety of amenities. Sequestration, as the across-the-board budget cuts are known, is causing wrenching disruptions — even undermining the functioning of the American judicial system.4

Shame or opprobrium, as would have been used in such circumstances by an active press or a “bully pulpit” president such as Teddy Roosevelt, are lacking. But times have changed and voters may care about the political deadlock but are not about to march on its behalf.5

In fact, the electorate seems fatigued to the point of disinterest. The press, hounded by the increasing economic power of the internet, is not blasting the Obstructionists as it once might have done. And then, one sector of the press is directed by Rupert Murdoch, whose record in this realm has been highly detrimental. Murdoch’s unexpressed hope is for his minority of Fox News fans to impose their will on the majority.

Ultimately, if not seriously attacked, obstructionism of this kind is a recipe for disaster. I see no way out of this nightmare scenario except for the launch of a national campaign to drive the obstructionists out of the Congress come November 2014. Particularly when characters like Liz Cheney, the daughter of the notorious former vice-president, come out of the woodwork and brazenly try to run for a seat in the Senate on a platform of “no compromise.”

I think a yearlong campaign of this kind needs to take the lead from politicians of the stature of Mayor Bloomberg and Bill Clinton. The time has come to call an end to OBSTRUCTIONISM before it is too late to preserve democratic government in the United States of America.

1for more on Values and Virtues, See Yorick Blumenfeld, Towards the Millennium, (1996) pp. 206-2252Gordon S. Wood, Empire of Liberty, (2009) p. 1433in a speech on conciliation with America, March 22, 17754“Justice Sequestered,” The International Herald Tribune, editorial page, July 23, 2013.5The lack of public protest will be examined in a forthcoming blog.

CHAOS is in the news everywhere: on the internet, in traffic, in the Arab world, banking, the National Security Agency, the Republican party, Britain’s National Health Service. The word is being used to describe global phenomena. “Chaos” instantly brings up mental images of confusion, uncertainty and instability leading to potential panic. However, chaos is also the word economists, politicians, and even weather forecasters fear.

For the ancient Greeks, Chaos was at the origin of all things. The word referred to the formless or void state preceding the creation of the universe. Chaos was the first of all the Greek primordial deities. Philosophers like Heraclitus regarded Primal Chaos as the true foundation of reality. Today theoretical physicists as well as contemporary philosophers, agree that metaphysically the creators of this mythology were not that far off the mark in separating void and matter and placing chaos before the creation of the earth itself.

Yes, the irrational, the unpredictable, the totally confused, the unexpected, and particularly the uncontrollable, must be viewed with a certain caution. Of course these aspects of chaos are what makes it completely unacceptable to every control freak in our midst. And these obsessives surround us!

Naturally there can be serious dangers accompanying chaos as well: On the eve of the military takeover in Egypt, a young Muslim in Cambridge told me that he feared chaos because it inevitably ends with the conservative forces winning and restoring the old order.

Physicists recognize that in the “Chaos theory,” which is the study of nonlinear dynamics, seemingly random events in complex systems and interactions are often predictable. The French physicist Henri Poincare discovered in the early 20th century that some astronomical systems, consisting of three or more interacting bodies could become highly unpredictable if there were minute errors in the initial measurements. Such unpredictability was far out of proportion with what mathematicians could expect. Physicists have declared that “Fundamental randomness has come to be called chaos.”1

Two decades ago an enthusiastic prize-winning professor of theoretical engineering wrote with extraordinary enthusiasm: “Never in the annals of science and engineering has there been a phenomenon so ubiquitous, a paradigm so universal, or a discipline so multidisciplinary as that of chaos. Yet chaos represents only the tip of an awesome iceberg, for beneath it lies a much finer structure of immense complexity, a geometric labyrinth of endless convolutions, and a surreal landscape of enchanting beauty … [This] is the omnipresent nonlinearity that was once wantonly linearized by the engineers and applied scientists of yore, thereby forfeiting their only chance to grapple with reality.”2

Beauty and chaos are seen by some as contradictory, but what theoreticians are after is principles whose simplicity is such that the consequences seem inevitable. We all recognize that there are turning points in the weather, in our lives, and in history. What the chaos theory highlights is that turning points are all about us. The smallest changes can unleash a chain of events that result, most literally, in a hurricane or a revolution.

Order can come out of chaotic fluctuations. It has been clearly established through fractals that there are patterns — there is order in chaos. The fractal geometry inherent in chaos has a clear connection to the harmonious arrangements found in crystals, snow-flakes, clouds, flowers, trees and humans.

Computer specialists, mathematicians and physicists working on Chaos continue to seek the natural laws about systems at the point of transition between the orderly and disorderly.

While we all like order, neat categories, progressive layerings and rational explanations, the random factor of chaos also is immensely appealing to our complex, divided and interactive minds. Our intellect sorts through the chaos of our perceptions and stores or pigeon-holes impressions in the brain with astounding precision.3

Our thinking patterns reflect the conflict between our attraction to order, structure and stability on the one hand and our fear of the unpredictability of anarchy on the other. What we don’t always grasp is our continuing dependence on change, variation and innovation to enrich our lives.

I think chaos can be transformative. It is really one of the few ways humanity ultimately can sort itself out of its global economic mess. Chaos may be able to triumph where scheming politicians, greedy bankers, and hoodwinked economists fail to come up with the basic changes necessary to create a more cooperative, more equal, more ecologically based and more spiritually aware system. The secret of chaos is that creativity begins when controls break down.

The economic structure of capitalism needs something far more profound than adjustments and corrections. The entire system needs a total rethink before a well-planned re-boot can take place. Why? Because I believe the global network of corporations which form the backbone of the capitalist system are “not fit for purpose.” Their very size and political and economic strength give them dangerous leverage on the democratic process. They are also the rare legal grouping on this planet which has no legally binding responsibilities beyond turning a profit for its shareholders.

For more than two decades I have been trying to convince all who will listen that for the sake of a civilized and human future on this planet we must call a halt to the spread and destructive power of ever larger corporations like Walmart — Destructive because it has forced the closure of tens of thousands of small shops and businesses around the world at the cost of innumerable jobs.1

The contrasts between a cooperative like the John Lewis Partnership in the UK and a global giant like Walmart could not be more extreme. I have had the opportunity to visit Walmart stores in five American states and John Lewis Partnership stores in four English cities.

Walmart is the largest retailer in the world with sales of $465 billion a year and is a model for low costs. About 48% of its shares (and profits) are owned by the Walton family. It is both reviled and admired for its competitive practices and its globally exploitative and anti-union stance.

The John Lewis Partnership is a co-op with some 90 major retail outlets in the UK. It has 84,000 partners and a turnover of about $30 billion (£19 billion) a year. It is often cited as a global role model of a co-op owned by all its working “partners.”

Walmart’s operations are on a staggeringly large scale. The gigantic warehouses which pass as stores are stacked with an incredible variety of low-priced goods which have made the enterprise popular with large numbers of Americans even though many of these goods have been produced under slave labor conditions in the Far East.

My experience has been that customers in Walmart’s discount department stores are not made to feel particularly welcome: some of the employees scurrying about look tense and stressed, as if they were working against the clock. These workers or “associates,” as they are called, (and there are a staggering 1.4 million of them in just the US) appear overworked and under-staffed. They are not allowed to unionize and are under intense surveillance by a management that distrusts them. Few social amenities are provided by the owners, the WASP family of billionaires whose total combined wealth is over $115 billion. This exceeds the combined wealth of the bottom one-sixth of Americans on the economic ladder.

Entering one of the major stores of the John Lewis Partnership is like a breath of fresh air: one is struck by the up-market welcome not only from the modern appearance of its stores but also from the relaxed and friendly greeting given by one of its eager “partners.” These “partners” can belong to any trade union they might like. At the end of every year they get a sizeable bonus based on the co-op’s annual profits — which last year equaled 17% of their annual salaries. This sum is calculated on the annual profit of the company. The pay of the head of this large enterprise is kept by this firm’s written constitution at no higher than 75 times times the hourly wage of the lowest employee.

It is unusual for corporations to have long-term objectives, even rarer for corporations to prioritize concern for the health, education, or remuneration of its employees. Pollution of the environment by vast corporations like Koch Industries is irrelevant to management except when it counters the usually weak enforcement of local laws.

Cooperatives have different goals from those of corporations: They endorse transparency in their operations, fairness, limited differentials between the lowest and highest paid, job protection, training of its members, gender equality, environmental improvement, and co-operation with other co-ops. The co-ops, with their concern for the local environment, would by their very format, also lower the overall and continuing rise of expectations. This would help to lessen the ever increasing stress and anxiety in the work force at large.

A powerful global network of co-ops would not only increase the power and responsibilities of workers but would also put work/jobs before profits or the returns on capital. In an age of ever-greater reliance on robotics — this is the best way to maintain and create gainful employment for millions of workers.

Perhaps something like the collapse of the European Union or, less dramatically, the meltdown of a major economy such as that of Spain, could lead to a trial run of a different economic system. Spain already has a creditable co-op, Mondragon, which is about the size of the John Lewis Partnership, and is the largest economic experiment of the Iberian peninsula. Mondragon’s cooperative network includes banking, 94 productive factories, 83,000 employees, various service groups, a university with 9,000 students and multiple global branches in China, the US, the UK, France and numerous other states, with a total turnover of around $20 billion. It thus serves as a good example of how today’s large corporations could be transformed into a more socially responsible co-op format.2

I do not pretend that cooperatives are perfect or could resolve all our global problems, but cooperatives are modeled on the written commitment that the workers come first — not the shareholders nor profits, efficiency, nor even the much demanded innovation.

The case is often made that corporations are the basis of innovation because of their demands for growth, new products, and higher profits. This involves serious risk taking which cooperatives are unlikely to underwrite. Cooperatives are not driven by the competitive spirit of corporations nor by the corporate interest in take-overs and expansion.

Law after law has been passed by The US Congress and the British Parliament to protect the interests of the corporation which now enjoys nearly all the rights and privileges of the most advantaged individuals of society yet none of the responsibilities. This absurd situation should never have arisen nor been tolerated. However, democratic politics seem incapable of abrogating the devious stratagems through which these laws were introduced by the legal profession working both in and out of politics..

Consequently, I have been calling for the ultimate legal transformation of all corporations into cooperatives. You can well imagine how the corporations would react to this: They would use billions of dollars to block any such transformation using the full army of lobbyists, PR consultants, lawyers and politicians on their payrolls. In proposing this global structural shift — I want to present a realistic alternative. I see such a transforming co-op system as integral to a new and more rational economic model.

Co-ops are long-term operators, not short-term gamblers. Our human survival is more important than the blinkered self-interest of corporate CEO’s and all their partners in short-termism. The change in perspective I am proposing is long overdue! It is the kind of economic reform the world badly needs.

The good governance of the John Lewis Partnership has been recognized by the three major political parties in the UK and has become the flagship role model. It has proven itself not only by its success and growth but also by the test of time.

The principles and governance were spelled out in impressive detail in the quite unique constitution of the Partnership and could serve as the model of Co-ops world wide.

For those readers who want to know more about this unique constitution, I am attaching some sections of this extraordinary document verbatim.

The Partnership exists today because of the extraordinary vision and ideals of its founder, John Spedan Lewis, who signed away his personal ownership rights in a growing retail company to allow future generations of employees to take forward his ‘experiment in industrial democracy’. Not unreasonably, he wanted to leave some clear guidelines for his successors, so that the values which had motivated him would not be eroded with the passage of time.

Lewis was committed in the 1930’s to establishing a ‘better form of business’, and the challenge for the Partners of today is to prove that a business which is not driven by the demands of outside shareholders and which sets high standards of behaviour can flourish in the competitive conditions of the third millennium. Indeed, they aim to demonstrate that adhering to these Principles and Rules enables them over the long term to outperform companies with conventional ownership structures.

The Constitution states that ‘the happiness of its members’ is the Partnership’s ultimate purpose, recognizing that such happiness depends on having a satisfying job in a successful business. It establishes a system of ‘rights and responsibilities’, which places on all Partners the obligation to work for the improvement of their business in the knowledge that they share the rewards of success.

When John Spedan Lewis, set up the Partnership he was careful to create a governance system, set out in the company’s Constitution, that would be both commercial and democratic – giving every Partner a voice in the business they co-own. This combination of commercial acumen and cooperative conscience, was ahead of its time, is still practiced today.

A system of checks and balances

“The Chairman, the Partnership Board, the divisional Management boards and the Chairman’s Committee form the management of the company. The Partnership Council, which elects five Partnership board directors, the divisional and branch level democracy, make up the democratic bodies that give Partners a voice and hold management to account.

Lewis also created the positions of Registrars and a Partners’ Counsellor who monitor and uphold the integrity of the business. The Registrars act as Ombudsmen and are responsible for ensuring that the Partnership remains true to its principles and is compassionate in its dealings with individual Partners.

The Partners’ Counsellor monitors and upholds the integrity of the business, its values and ethics as enshrined in its constitution. At the moment this woman is a member of the Partnership Board and performs the role of senior independent director in her interaction with Partners as co-owners of the business. She supports the elected directors in their contribution to the Board and thereby helps underpin their independence. The Partners’ Counsellor convenes meetings with the elected directors, without other executive directors being present, as appropriate and at least once each year.

1 The two Settlements in Trust made by John Spedan Lewis in 1929 and 1950 established a business known as the John Lewis Partnership, to be owned in trust for the benefit of its members, who are Partners from the day they join.

2 The trustee of the Settlements is John Lewis Partnership Trust Limited (‘the Trust Company’), and its Chairman is the Partnership’s Chairman. Its other directors are the Deputy Chairman and the three Partners elected by the Partnership Council as Trustees of the Constitution (Rule 18(ii))…

6 The Partnership aims to conduct all its business relationships with integrity and courtesy, and scrupulously to honour every business agreement.

7 The Partnership aims to obey the spirit as well as the letter of the law and to contribute to the wellbeing of the communities where it operates…

46 Because the Partnership is their own business, Partners must be aware of all its principles, do their best for it and help each other to fulfill their duties and responsibilities to it.

47 All Partners, especially managers, have a responsibility to be imaginative and energetic in promoting each other’s wellbeing and to recognise the importance of a healthy balance between the needs of the Partnership and the personal life of Partners.

48 Working conditions for Partners must be comfortable and businesslike but not luxurious.

49 Partners must be scrupulously honest in their dealings with the Partnership and with each other, and never seek to gain from the Partnership any more than they sincerely believe is fair.

50 Partners must respect and be courteous to each other and to anyone else with whom they have dealings on behalf of the Partnership. The Partnership will do all it can to encourage good personal relationships between Partners at all levels…

53 The Partnership seeks to recruit only those who share its values and will contribute to its success.

54 The Partnership takes no account of age, sex, marital status, sexual orientation, ethnic origin, social position or religious or political views.

55 The Partnership employs disabled people in suitable vacancies and offers them appropriate training and careers.

56 The Partnership encourages Partners to fulfil their potential and increase their career satisfaction in the Partnership, by:

(i) promoting Partners of suitable ability; (ii) encouraging changes of responsibility; (iii)providing knowledge and access to training to help them carry out their responsibilities better; (iv) encouraging their personal development and interests in fields not directly related to their work.

57 No Partnership contract of employment will have a notice period longer than 12 months, unless the Partnership Board agrees.

58 Every Partner is free to belong to a trade union, although if there is conflict between a trade union and the Partnership those concerned must consider carefully their responsibilities as Partners.

59 A Partner’s performance is reviewed with him by his manager at least once a year.

60 The personal records and details of Partners are made available only to those who are properly authorised to see them.

61 The Partnership sets pay ranges which are informed by the market and which are sufficient to attract and retain high calibre people. Each Partner is paid a competitive rate for good performance and as much above that as can be justified by better performance. Partnership Bonus is not taken into account when fixing pay rates.

62 Pay rates must be decided with such care that if they were made public each would pass the closest scrutiny. Managers are responsible for ensuring that Partners are paid fairly in comparison with others who make a similar contribution…

73 The Partnership provides amenities that it believes will be welcome to individual Partners and will promote happiness, a sense of community and the Partnership’s reputation.

74 In its expenditure on amenities the Partnership will not confine itself to things that may be provided inexpensively, but will be open-minded and ready to provide things that may offer exceptional opportunities for only a minority of Partners.

75 The Partnership offers pensions to Partners based on their rate of pay, length of service and working hours. Pensions are set at a level which the Partnership Council judges will, taking account of state pensions, enable those Partners who have spent most or all of their working lives in the Partnership to provide for their needs during retirement.